Robust jobs data delivers a swerve to markets

Financial markets have not exactly gone to plan so far this year.

To the tut-tutting of big money managers, January brought gains in the value of risky assets — a vote of confidence in the soft-landing narrative. At the same time, government debt markets kept up their warnings of a serious recession ahead with robust demand for long-dated bonds that crammed their yields below short-term debt — the dreaded inverted yield curve that has been the harbinger of so many downturns.

“Something seems amiss to me,” Greg Peters, co-chief investment officer at PGIM Fixed Income, told me at the start of this week. “You can’t have a steeply inverted curve, rate cuts being priced in presumably because recession is looming, and risk assets not really pricing in those outcomes. All those things can’t be true.”

He was right. After Friday’s release of data showing the US economy added more than 500,000 jobs in January, streaks ahead of the 185,000 expected, it feels like the recession bet simply must be wrong.

That is great news for the average human. It is less great news for economists and fund managers, who had almost unanimously pencilled in an economic downturn, judging from the annual exercise by investment house Natixis to scour the thousands of pages of year-ahead outlooks from big banks and asset managers. (Thank you for your service, Natixis.)

Its analysis shows that the supposedly big brains in the market were, in aggregate, neutral on the US stocks and outright negative on Europe. This has worked out very badly so far. By the time February kicked off, stocks in both regions were up by about 6 per cent.

But the apparently rude health of the US jobs market suggests that downbeat view on stocks may turn out to be right, for the wrong reasons. It completely resets the main risk to markets for the rest of this year.

Now, said Mike Bell, global market strategist at JPMorgan Asset Management, “the big risk to markets this year is not a recession but a labour market that remains robust. This would mean the Fed cannot deliver the rate cuts that the market is pricing in.”

To wit, when stocks opened an hour after the employment data, the US’s S&P 500 index dropped a chunky 1 per cent before regaining a little poise.

Alan Ruskin, a strategist at Deutsche Bank, pointed out that the numbers were a little out of whack. “There is a feeling that the labour market just does not fit with multiple other weak growth signals,” he said in a note to clients. “This is true.”

Still, he added, “at a minimum the data adds to the perceptions of a unique cycle, requiring a unique policy response”. It also rips up many investors’ game plans for the year, precisely because it hands the Federal Reserve a golden opportunity to raise interest rates much higher than market participants had previously expected.

Even before the non-farm payrolls data, some investors fretted that the rally in stocks, which has been in play since October, would eat itself, by generating excess exuberance and, by extension, more inflation. But bulls were prepared to stick with it, in part because the interest rate setters in the US did not tell them they were wrong.

This week, the Fed delivered a slimmed-down quarter-point rise in interest rates. Chair Jay Powell told reporters “we’ve got a long way to go” to get inflation under control. But at the same time, he noted the emergence of disinflationary forces, and, importantly, passed up the opportunity to say that frothy markets had got ahead of themselves.

So, now what? This is certainly a vindication for those who believed the rally in risky assets, particularly in the US, had run too far.

Among them is Iain Cunningham, co-head of multi-asset growth at asset manager Ninety One. He is of the view that the full force of the super-aggressive monetary tightening in 2022 had not yet properly leaked into asset valuations. “What the Fed’s done and the ECB — that degree of tightening is definitely going to bite,” he says.

He was looking on at the rise and rise in stocks at the start of this year in disbelief, convinced that recession risks were simply not properly reflected. Again, he may turn out to be right about the market, and wrong about the recession, but the result is the same: the point at which the market is crying out for interest rate cuts and the Fed jumps the other way is the moment that “risk assets really don’t like”, he says.

Investors now have to go back to the drawing board and sort out their thinking about what will really drive markets this year. Like the Fed, they will struggle to make meaningful guesses about the future and instead will need to be flexible from one data release to the next.

“It is pretty clear the market has been caught ‘offside’ when it comes to the favourite trades of the year,” said Deutsche’s Ruskin. “At a minimum this data will demand traders retreat and regroup.” They may also have to embrace being wrong.

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First heart patients diagnosed using new fibre optic technology

New diagnostic technology that uses fibre optics to find the causes of heart disease has begun clinical testing at London’s St Bartholomew’s Hospital.

The iKOr device, developed at Barts Health and University College London, measures blood flow around the heart. Researchers say it could eventually help many thousands of patients suffering from cardiovascular symptoms such as chest pains, whose cause cannot be identified with current techniques.

“This new device is a game-changer in how we manage heart disease, making it a lot easier to assess the health of a person’s heart,” said Anthony Mathur, clinical director for interventional cardiology at Barts.

Three patients have so far undergone the new iKOr procedure, which is particularly suited to finding problems with their “microvasculature”. These tiny blood vessels do not show up well in the angiograms typically used by cardiologists to image the heart’s larger arteries.

Margaret Green, 75, one of the three pioneers, told the Financial Times the procedure “was a strange feeling but not uncomfortable”. She suffers from angina and shortness of breath.

“Now I feel great. I found out that I have something I’d never thought about: microvascular disease,” added Green. “It’s brilliant that this research is being carried out in the NHS.”

A consultant looks at an angiogram to decide whether to fit an iKOr device © Charlie Bibby/FT

Once identified, microvascular disease — in which blood vessels narrow and thicken — can be treated with specific drugs that would not be prescribed without a diagnosis.

The iKOr device has a temperature and pressure sensor that is just 0.2mm wide — or twice the thickness of a human hair — which is threaded through the patient’s blood vessels on an ultra-thin catheter.

It measures the flow rate around the heart by flashing a brief pulse of light upstream of the vessels under investigation, which warms the blood there by about one degree.

The sensor detects the time taken for the temperature to change downstream, from which the device can tell whether the flow is obstructed by narrowing of the vessels.

Medical physicists and engineers at University College London invented this fibre optic sensing technology. In 2019 they set up Echopoint Medical to commercialise it in partnership with Barts.

Malcolm Finlay, consultant cardiologist at Barts and Echopoint’s chief medical officer, said the spinout company had so far received £2.3mn in equity funding from venture capital firms Albion Capital and Parkwalk, plus £1.8mn in grants from the government agency Innovate UK.

“This shows the real, tangible benefit that collaboration between NHS hospitals and universities can have for patients,” said Finlay. “It’s a great example of why it’s important to carry out research in the NHS.”

A registrar holds the tiny wire blood flow monitor
The iKOr sensor measures blood flow through small arteries © Charlie Bibby/FT

The first phase of clinical testing will involve 10 patients and is likely to have finished by the end of May. Then, subject to regulatory approval, there will be a larger trial with 100 patients, Finlay said.

He estimated that the device would be commercially available in the NHS in three years’ time. Echopoint will then take the technology overseas.

The procedure will add only slightly to the cost of a standard angiogram, said Finlay, adding: “We believe that savings from personalised diagnosis of patients will vastly offset any costs of using the device.”

Several hundred thousand patients a year worldwide could benefit from the technology, he said — particularly women, in whom microvascular disease is more common than men.

Colin Berry, professor of cardiology and imaging at the University of Glasgow, who was not involved in the UCL/Barts research, welcomed the new technology, saying: “It could provide clinicians with a simpler and quicker way to diagnose microvascular angina.”

Activision Blizzard pays $35mn SEC settlement over workplace complaints

Activision Blizzard, the maker of popular video games including Call of Duty, has agreed to pay a $35mn fine to settle charges relating to its handling of workplace discrimination and harassment allegations.

In a statement on Friday, the Securities and Exchange Commission said the company had been aware between 2018 and 2021 that its business units lacked the controls and procedures needed to collect and assess employee complaints about workplace misconduct.

As a result, its management “lacked sufficient information to understand the volume and substance of employee complaints about workplace misconduct and did not assess whether any material issues existed that would have required public disclosure”, the SEC said.

Activision, which is facing a separate lawsuit from US regulators seeking to stop its $75bn sale to Microsoft, faced a staff walkout in 2021 after its management dismissed allegations in a California lawsuit that it had harboured a “frat boy” culture as “inaccurate”.

Later that year, chief executive Bobby Kotick apologised for the “tone deaf” response as the company told staff that it had fired 20 employees and reprimanded another 20 in an effort to build a “more accountable workplace”. The company also last year agreed an $18mn settlement with the Equal Employment Opportunity Commission, a federal agency that oversees civil rights issues in the workplace, regarding claims of sexual harassment, pregnancy discrimination and related issues.

The SEC’s seven-page order found Activision had signed separation agreements with staff leaving the company requiring them to tell the company if they received any request for information from the regulator’s staff, in violation of whistleblower protection rules.

Jason Burt, director of the SEC’s Denver regional office, said: “Activision Blizzard failed to implement necessary controls to collect and review employee complaints about workplace misconduct, which left it without the means to determine whether larger issues existed that needed to be disclosed to investors.”

“Moreover, taking action to impede former employees from communicating directly with the commission staff about a possible securities law violation is not only bad corporate governance, it is illegal,” he added.

The SEC said it was not aware of any specific examples of former Activision employees being prevented from communicating with its staff, however.

Activision said it was pleased to have resolved the matter amicably. “As the order recognises, we have enhanced our disclosure processes with regard to workplace reporting and updated our separation contract language. Activision Blizzard is confident in its workplace disclosures.”

Activision shares were down almost 2 per cent at $75.71 in mid-day trading in New York. The company is due to report fourth-quarter earnings next week.

Google invests $300mn in AI start-up Anthropic

Google has invested about $300mn in artificial intelligence start-up Anthropic, making it the latest tech giant to throw its money and computing power behind a new generation of companies trying to claim a place in the booming field of “generative AI”.

The terms of the deal, through which Google will take a stake of about 10 per cent, requires Anthropic to use the money to buy computing resources from the search company’s cloud computing division, said three people familiar with the arrangement.

Google’s move highlights the influence that a small number of Big Tech companies have assumed over other companies working on AI, which need access to cloud computing platforms to handle the giant AI models developed by groups such as Anthropic.

The search company’s investment also echoes the $1bn cash-for-computing investment that Microsoft made in OpenAI three years ago.

The Microsoft deal set OpenAI on a path to building a series of breakthrough AI systems, culminating in the launch late last year of ChatGPT, a chatbot that can converse with users through text. The software giant followed up last month with what it described as a second, “multiyear, multibillion-dollar” investment in the company.

Both OpenAI and Anthropic are seeking to make developments in generative AI, sophisticated computer programs that can write scripts and create art in seconds.

While Microsoft has sought to integrate OpenAI’s technology into many of its own services, Google’s relationship with Anthropic is limited to acting as the company’s tech supplier in what has become an AI arm’s race, according to people familiar with the arrangement.

Anthropic was formed in 2021 when a group of researchers led by Dario Amodei left OpenAI after a disagreement over the company’s direction. They were concerned that Microsoft’s first investment in OpenAI would set it on a more commercial path and detract from its original focus on the safety of advanced AI.

Anthropic has developed an intelligent chatbot called Claude, rivalling OpenAI’s ChatGPT, though it has not yet been released publicly.

The start-up had raised more than $700mn before Google’s investment, which was made in late 2022 but has not previously been reported. The company’s biggest investor is Alameda Research, the crypto hedge fund of FTX founder Sam Bankman-Fried, which put in $500mn before filing for bankruptcy last year. FTX’s bankruptcy estate has flagged Anthropic as an asset that may help creditors with recoveries.

Google’s investment was made by its cloud division, run by former Oracle executive Thomas Kurian. Bringing Anthropic’s data-intensive computing work to Google’s data centres is part of an effort to catch up with the lead Microsoft has taken in the fast-growing AI market thanks to its work with OpenAI. Google’s cloud division is also working with other start-ups such as Cohere and C3 to try to secure a bigger foothold in AI.

Google and Anthropic declined to comment on the investment, or on what say, if any, the tech giant would have over the start-up’s business.

According to a filing in Delaware, where Anthropic is incorporated, it has two classes of stock, one of which carries 10 times the voting rights of the other. Dual-class stock arrangements such as this are often used by founders of tech companies to make sure they stay in control and can dilute the influence of outside investors.

Additional reporting by Tim Bradshaw in London

FTSE 100 beats 2018 peak to hit all-time high

The UK’s FTSE 100 hit an all-time high on Friday, as the blue-chip index dominated by multinational companies overcame the drag of a domestic economy headed for recession.

The FTSE added as much as 1.1 per cent on the day to trade at 7906.58, eclipsing its previous peak in May 2018, before closing at 7902. After ending 2022 up almost 1 per cent, the best-performing developed market index in local currency terms, the FTSE 100 has risen 6.1 per cent in 2023.

The UK has in the past been dismissed for being too exposed to oil and mining groups, banks, insurers, and utilities and consumer staples, and for lacking high-growth technology stocks to rival the likes of Apple, Amazon and Alphabet.

“But these vices look a little more like virtues” now that inflation and rising rates are squeezing tech valuations and pushing investors towards “potential stores of value”, said Russ Mould, investment director at broker AJ Bell.

Shell, the Anglo-Dutch oil major that is the second-biggest company on the London Stock Exchange, gained 43 per cent last year, while HSBC, the banking heavyweight, gained 15 per cent as higher interest rates boosted its profits.

Sterling’s devaluation against the euro and the dollar since Brexit has helped, too, lifting FTSE 100 companies in sectors such as oil production and basic materials that book the bulk of their revenues overseas. The pound fell 1.2 per cent on Friday.

The FTSE’s gains have come as global equity markets are buoyed by cooling global inflation and hopes that central banks will slow the pace of interest rate rises. The Bank of England on Thursday indicated that it may be close to ending its cycle of rate rises.

“I’m surprised by how strong markets are in general right now, but I get it with the UK,” said Neil Birrell, chief investment officer at Premier Miton. “There’s genuine value in the [FTSE 100], and it’s cheap.”

The long-term performance of the UK stock market remains unimpressive. The FTSE is up just 14 per cent since its dotcom era high in 1999. Since then, the value of the US S&P 500 has risen by more than two-and-a-half times.

However, the oil companies and banks that dominate the FTSE helped the UK market dodge the worst of 2022’s global equity rout, which saw the high-flying US tech sector battered by rising interest rates and dragged the S&P 500 to an almost 20 per cent decline last year.

Companies with larger imported costs, along with those more exposed to local demand, have fared less well. The mid-cap FTSE 250, which contains more interest rate-sensitive stocks and better reflects the state of the British economy, has fallen 6 per cent in the past 12 months.

Additional reporting by Martha Muir

Nigeria’s attempt to replace its currency notes descends into chaos

Nigeria’s attempt to replace its high denomination currency notes less than a month before a crucial general election has descended into chaos, with long lines of people forming outside cash machines and fights breaking out inside banks as customers demanded access to their own money.

Lengthy queues were visible at ATMs across Lagos, Nigeria’s economic capital, as the failure of the authorities to print enough of the new notes left lenders struggling to meet demand.

One FirstBank branch in the Ikoyi district was closed when the Financial Times visited, with many customers locked out. A security guard said he was ordered to lock the doors after brawls broke out inside. The cash machine at the branch began to dispense cash a few hours later but with a 10,000 naira limit per customer.

Another nearby Lotus Bank was so full that a tent was erected to protect queueing customers from the scorching sun.

Japhet Joshua Babatunde, one of those outside the FirstBank branch, said he had been unable to withdraw his salary despite being paid a week ago. “I’m angry — it’s my own money I came to collect, not a loan,” he added. Another customer, Uhegbu Maria Odichinma, said she had visited the same branch five days in a row to try to get hold of the new notes. Videos circulating on social media showed customers stripping to their underwear at local branches as frustration mounted over the currency scarcity.

Nigeria’s central bank said in October that the N200, N500 and N1,000 notes would be replaced with new designs it said would be more secure. The old notes were due to be taken out of circulation on January 31, but the unavailability of replacements led to the deadline to switch being extended until next Friday, leaving Nigerians struggling to access money in an economy still largely reliant on cash for most transactions.

“We urge [people] to exercise patience as the Nigerian central bank is working assiduously to address the challenge of queues at ATMs,” the central bank said in a statement, acknowledging the chaotic rollout.

Muhammadu Buhari, the outgoing president, on Friday asked Nigerians to “give him seven days to resolve the cash crunch”. But he also blamed banks for being “inefficient” and “only concerned about themselves”.

“Even if a year is added, the problems . . . won’t go away,” he said, adding that he had been reassured by the central bank that it was capable of supplying enough notes. The bank has already collected almost N2tn in old currency.

The head of one of Nigeria’s biggest lenders told the FT that many banks were not supplied with enough of the new notes to meet demand. The new currency is meant to be harder to counterfeit.

A payments industry executive also said that while the central bank was encouraging Nigerians to use other channels, such as cards and electronic payments, many banks did not have the infrastructure to scale up. “Electronic transactions are failing because of the volume increases that no one did anything to prepare for,” the executive said.

The currency crisis comes ahead of the presidential and parliamentary elections to be held on February 25. Bola Tinubu, candidate for the ruling All Progressives Congress, said at a recent campaign event that unnamed opponents were trying to use the controversy over the new naira to sabotage his campaign.

Analysts said the currency redesign had disrupted some politicians’ plans to induce voters with cash bribes they had stowed away ahead of the elections. The bank chief said: “There were multiple objectives that were sold to the president. At the core of it, it was the idea that this could help secure the election from vote-buying. They convinced the president that a lot of people had piled up money to buy votes during the election and that the best way to deal with that was to do the change.”

In a country with a large black market supplying fuel, US dollars and other items, a shadow economy has emerged for the new notes. Banking agents, who typically supply cash in remote areas, have jacked up their commissions. A withdrawal of N5,000 used to attract a charge of N100, now agents are asking for N500.

Adani/TotalEnergies: French company’s due diligence was inadequate

Until this year Indian billionaire Gautam Adani had star quality, and with it a gravitational pull. That force attracted a top corporate investor TotalEnergies into the Adani orbit. It has invested $3.1bn in various Adani Group companies since 2018, including into the listed Adani Total Gas and Adani Green Energy. Both shares have halved in value since the publication of a critical report on the Adani Group by short seller Hindenburg Research last week.

This is embarrassing for TotalEnergies. Concerns about Adani had surfaced in August, yet the French company only commented on Friday. Claims that its exposure only represents about 2 per cent of capital employed should not diminish shareholder concerns.

These investments, public and private, focused on helping India reduce its carbon footprint. Coal supplies 44 per cent of the country’s energy consumption, according to the International Energy Agency.

TotalEnergies bought over 37 per cent of the locally listed Adani Total Gas in October 2019 to sell LNG into India. Despite this month’s fall, its share price remains well above TotalEnergies’ likely entry price. Also, Adani Total Gas appears to have minimal leverage with net debt of worth $100mn, about the same as its trailing ebitda.

However, the French energy group could have a problem with Adani Green Energy. The former acquired a 19.75 per cent interest in this company, one of India’s largest renewable power producers, in January 2021. Then that was worth about $4bn. As of Friday that was worth 11 per cent less.

Adani cannot afford to lose TotalEnergies’ support. Though profitable, Adani Green Energy is highly leveraged at 14 times its historical ebitda with rapidly rising capital spending. Moody’s noted in August that a key credit risk factor for Adani Green Energy, given its debts, was any reduction in the shareholding by TotalEnergies.

Adani’s star shows every sign of burning out. TotalEnergies must not only consider marking down its exposure to the Adani Group, but should also rethink its India energy strategy.

Britain should not accept its status as the ‘sick man of Europe’

The writer is a former permanent secretary at the UK Treasury

The IMF has held a totemic place in British discourse ever since 1976, when the country lost the confidence of the markets and had to apply for an emergency loan. So when the Fund predicts, as it did this week, that the UK will grow slower than any other advanced economy, it needs to be taken seriously.

Add to the mix a level of industrial unrest not seen in decades, the Bank of England revising down to 1 per cent its view of the economy’s trend rate of growth, a rate not experienced since the 1970s, and the general gloom around the third anniversary of Brexit — and it’s tempting to ask whether Britain has regained its status as the “sick man of Europe”.

Forecasting is a mug’s game. Britain’s economy may or may not grow this year. Germany and France may grow faster. But none of the big European economies are predicted to grow by more than 1 per cent. This is a world of small numbers in which no country will be satisfied with its performance.

Gross domestic product statistics are notoriously unreliable in the short run, which is why, when I was at the Treasury, I preferred to focus on revenues. These rarely lied. They may be flattered by inflation at present but they still indicate that the economy has been stronger than many had feared. Falling energy prices will provide further support.

Britain still has a lot going for it. It has strong university cities, not least London, a thriving research base, great creative industries and an irrepressible financial sector. Unlike in the 1970s it has a dynamic labour market. We should not get too downhearted.

But there is no denying that Britain has a problem.

First, Rishi Sunak, the prime minister, and Jeremy Hunt, the chancellor, are still picking up the pieces from their disastrous inheritance. To regain credibility, they have had to pursue a much more restrictive policy than would have been the case had Liz Truss never become premier. At the same time, the Bank of England will have to keep interest rates higher for longer, having kept policy too loose in 2021. Macroeconomic policy will hold back growth in the short run. But that’s a price worth paying for restoring stability.

Second, there was a perfectly respectable political case for Brexit. And many of Britain’s problems predate its departure from the EU. But the evidence that Brexit is a drag on economic performance is compelling. Britain’s trade is growing more slowly than it did in the past. Inward investment is lower now that the UK is no longer a gateway to the single market. In a protectionist world dominated by large trading blocs Britain finds itself isolated. The tide of competition, which was a central driver of British productivity growth in the 1990s and 2000s, has receded.

Third, the UK has an inefficient and underpaid public sector. The government’s solution has been to use inflation to impose the biggest cuts in real wages in generations. History suggest this policy is unsustainable.

Finally, the economy is suffering from chronic under-investment, both in the private and public sectors. Infrastructure policy has been driven by prestige projects rather than a hard-headed focus on which ones might yield the biggest economic return. Lack of house building and poor land use remain major barriers to growth. Every government promises planning reform; every government backs off.

But all is not lost. The pendulum has begun to swing. The Sunak government is showing signs of wanting to tackle problems rather than to deny their existence, notably by making the NHS one of its “five priorities”. A re-energised Labour party is waiting in the wings.

Positive noises are also emerging from the negotiations on the Northern Ireland Protocol. If the government can finally get Brexit done, it can begin to focus on how Britain co-operates with the EU. This will be a slow process. But the country will find a new equilibrium consistent with the wishes of the electorate to make it easier to do business with our main trading partner.

Next, it needs to create an environment that encourages investment and innovation. Macroeconomic stability should help, as would a supportive tax regime. Public investment needs to be focused on maximising returns. At some point, a government will create a better planning system and more efficient taxes on property. But above all ministers need to prioritise skills, now that we no longer rely on the central European taxpayer to train our workforce.

Sooner rather than later the government needs to accept that it can’t cut wages in the public sector year after year. But the quid pro quo needs to be a renewed focus on reform and productivity. The obvious starting point is the NHS.

The country needs an honest conversation about what an ageing population and a more dangerous world means for taxation. Simply raising the age of eligibility for the state pension is not enough. Sunak missed a trick when he repealed the health and social care levy. He should resist backbench Tory calls for pre-election tax cuts the country can’t afford.

For much of the last 40 years, the British economy outperformed those of our near neighbours. If the nation grasps the nettle of sensible structural reform, there is every reason it can do so again.

 

Ford to return to Formula 1 with Red Bull deal after two-decade absence

Ford is returning to Formula 1 after a two-decade absence in an effort to drive demand for its electric vehicles, just as the sport starts to shift from the traditional engines for which it is renowned.

The US carmaker has joined forces with Red Bull to return to the sport in 2026, when new rules requiring the use of sustainable fuels come into force.

As it invests $50bn into its electric vehicles business, Ford is betting that its return to F1 will allow it to showcase its technology while increasing awareness of its cars. Red Bull Ford Powertrains will provide engines to both of Red Bull’s F1 teams, which include the reigning world champions and Scuderia AlphaTauri.

Ford’s decision comes as F1, which is owned by US billionaire John Malone’s Liberty Media, has in recent years expanded the number of races in the US. The sport has also been boosted by the success of Formula 1: Drive to Survive, a Netflix series tracking the drama of a F1 season.

Liberty Media has sought to redraw the economics of the sport to entice manufacturers and investors. A spending cap for teams has been imposed and technical changes made to cars that are designed to make races more competitive.

Ford quit F1 in 2004 after several decades during which it racked up 10 constructors’ championships and 13 drivers’ championships before it left the sport. It remains the third most successful engine manufacturer in F1 history. 

“Ford is a global brand with an incredible heritage in racing and the automotive world and they see the huge value that our platform provides with over half a billion fans around the world,” said Stefano Domenicali, chief executive of Formula 1.

Bill Ford, the carmaker’s chair, said: “This is the start of a thrilling new chapter in Ford’s motorsports story that began when my great-grandfather won a race that helped launch our company.”

The company is expected to set out further details of its F1 plans later on Friday. 

The growing interest among carmakers shows how the sport’s expansion into the US and the Middle East is starting to pay off. Volkswagen and General Motors have both also explored a return to the sport.

VW’s Audi brand has acquired a minority stake in Sauber Group, which already owns an F1 racing team. The upcoming engine changes in 2026 have attracted Porsche, which is championing zero-carbon liquid fuels as a way of continuing to sell engine-based cars. 

However, Porsche abandoned talks last year to partner with world champions Red Bull after failing to agree terms.

Ford’s announcement comes a day after the group’s latest results showed it slumped to a $2bn loss last year, as a writedown on its stake in electric vehicle group Rivian, the continued chip shortage and the shutting of its self-driving car business took their toll.

Jim Farley, Ford chief executive, said on Thursday that he was “frustrated” with the company’s progress, adding that strong sales of some models had masked wider “dysfunctionality” within the business.

For love or money: the hidden victims of financial abuse

This article is the latest part of the FT’s Financial Literacy and Inclusion Campaign

How people manage money with their other halves is something I find fascinating, particularly because so few of us ever talk about it — sometimes, even within our own relationships.

It’s possible to read the financial compatibility runes before your very first date. Will it be a swanky restaurant, street food or double espresso? And will they insist on paying, go Dutch or bring along a discount voucher? (Martin Lewis once said the latter was a sure-fire sign your date was marriage material — you may disagree).

It could be a while before you disclose your property ownership status or how much you both earn. I know a surprising number of couples who have no idea what their other half makes.

Normally, it’s not until you start living under the same roof that questions about joint accounts and how you might divide and mingle your money come up — and this is the point at which things can take a sinister turn.

One in six women has experienced financial abuse from a current or former partner, according to research by the charity Surviving Economic Abuse and it really can happen to anyone — including financial experts.

On Money Clinic podcast this week, I spoke to Sarah Coles, a senior personal finance analyst with Hargreaves Lansdown, who was trapped in a financially abusive relationship for years.

She likens the experience to “slowly boiling a frog”. As the abuse builds up so gradually over time, “you just adapt, and then it becomes this impossible situation”.

It’s all about control — and when an abuser controls your finances, they can control everything you do.

At first, her ex-partner would sulk if she spent her own money on things she needed, but over time his reactions became more extreme, evolving into rules about what she could and could not spend money on. If she tried to push back, the restrictions would tighten. Sarah ended up working three jobs to support the family, while he quit his job and spent money like water.

Financially and emotionally drained, victims of abuse feel powerless to leave, and our secrecy about money as a society plays into the hands of abusers.

Charities say many abusers are using the cost of living crisis as a tool, providing a convenient cover story if they take away a victim’s car or stop them from socialising with friends.

Sarah’s friends and family had no idea what was going on until one day, she was caught off guard by a question about why her clothes didn’t fit, and admitted she wasn’t allowed to buy new ones.

As she tells me on the podcast, after that conversation, she could clearly see that she needed to get out. “You’re just so busy coping with it that you don’t really take a step back and think about the full picture of what’s happening to you.”

After her ex passed away, Sarah chose to speak out about her experiences to raise awareness of how common a problem this is: “Personally, I don’t feel at all ashamed — I think anyone can fall victim to abuse.”

Nor is this problem exclusive to women, or indeed heterosexual relationships.

Arguments about spending too much money are part and parcel of everyday life as bills soar, but is your partner prepared to compromise, or will they wield control?

I have a friend who left her (female) partner after years of being financially bullied via the unlikely medium of an Excel spreadsheet. The lower earner by some margin, she would feel nervous if her girlfriend suggested they went to a fancy restaurant. If they had any kind of disagreement over the meal, her partner would coolly add “make sure you put your half of this on the budget spreadsheet” knowing this would wipe out her ability to socialise for the rest of the month.

Having children can also be a catalyst for abuse if one partner becomes a full-time carer and loses their earnings power (we hear from another survivor on the podcast who experienced this).

The loss of earnings power is tricky to navigate in non-abusive relationships. After years of being financially independent, feeling like you have to beg your partner for money is deeply uncomfortable.

And while leaving all the “money stuff” to your husband might have been the norm in previous generations, this could cost you in more ways than one.

Wealth managers say it’s often a huge struggle for widows to take the financial reins later in life (it’s also a challenge for an industry geared towards supporting the needs of male clients).

For younger generations, there are different issues. The high cost of renting a home on your own — let alone buying one — adds to the pressure to couple up swiftly, and could also make it much harder to leave a bad relationship.

Your Juno, a financial education app aimed at Gen-Z women, introduced specific modules about financial abuse after a poll of its users found that 26 per cent had already experienced it.

The importance of building up a “Fuck Off Fund” (a phrase immortalised by a Billfold article by the US financial journalist Paulette Perhach) is by far the most downloaded lesson in the app, says co-founder Margot De Broglie.

“A lot of community members have shared that they leave any financial talk until it becomes absolutely necessary, so quite late into a new relationship,” she adds, making it harder to spot warning signs.

A separate module on how to bring up the topic of finances when dating is also incredibly popular, offering a range of questions to test the waters in the early stages of a relationship (“Are you saving up for anything fun?”) building up to when things get more serious (“What financial decisions do you think should be made as a couple?” or “If I spent £100 on something and didn’t tell you, would you be upset with me?”)

Users are also urged to watch out for potential signs of financial manipulation, including their partner being secretive about money, having a lifestyle that’s at odds with their income or asking to borrow money.

Surviving Economic Abuse has found that 60 per cent of people who experience financial abuse will also be coerced into debt by their partner, making it even harder to leave and rebuild their lives.

“Creditors can be fantastic, and in many cases can write off the debt completely,” says Nicola Sharp-Jeffs, the charity’s founder, noting that banks are now doing more to help victims (TSB and HSBC offer “safe spaces” in branches and, increasingly, employers have policies around domestic abuse).

Slowly, the financial industry is waking up to the scale of this problem. But the hidden nature of financial abuse partly rests on the taboo nature of discussing how we manage money in relationships and getting a sense check about what is normal, and what is not. I definitely think it’s something we should all try to talk about.

Claer Barrett is the FT’s consumer editor and the author of ‘What They Don’t Teach You About Money’. [email protected]